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Online Pharmacy And E-Pharmacy Laws In India

Tuesday, May 24, 2016

Salient Features Of The Nagaland Gaming Act, 2016

The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill, 2015 (“Bill”) has now become an applicable law and very soon rules would also be added to the same. Once the rules are added, actual implementation of the Nagaland Gaming Act, 2016 would be possible.

Surprisingly, the Nagaland Gaming Act, 2016 has not been made public by the government of Nagaland so far. Perry4Law Organisation (P4LO) has already contacted the Nagaland government and has requested for the official documents in this regard so that we can share the same with gaming stakeholders. For the time being, Perry4Law Law Firm has provided an analysis of the Nagaland Gaming Act, 2016 based on the publicly available information and inputs. Please see the Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Bill 2015: Salient Features (pdf) for the complete analysis.

However, for those who are in a hurry, we have also provided an abridged version of this analysis. Please see the article titled Salient Features Of The Nagaland Prohibition Of Gambling And Promotion And Regulation Of Online Games Of Skill Act 2016 in this regard. Many online poker, online rummy and online fantasy sports entrepreneurs would be happy to apply for a licence in due course of time.

However, we at Perry4Law Law Firm believe that the Nagaland Gaming Act, 2016 has certain "legal infirmities" that must be immediately removed by the government of Nagaland. Otherwise, online gaming stakeholders would be vulnerable to legal risks and litigation threats across the nation.

Some of the salient features of the Nagaland Gaming Act, 2016 are as follows:

(1) The Act allows games of skills and prohibits games involving gambling elements.

(2) Some games have been specifically included in games of skill and this would reduce the confusion about the nature of gambling activities. However, inherent conflicts and inconsistency is there in the provisions of the Act and this would create problems for the gaming stakeholders in future.

(3) Severe fines have been prescribed by the Act for gambling activities. For instance, a fine of Rs 20 lakhs will be applicable in the first instance, followed by an imprisonment of 6 months if not remedied further.

(4) Games which have been declared by courts (Indian or International) as games of skill may be included in this list in future. The Finance Commissioner or any Licensing Authority will be permitted to add to this list the games of skill as long as it is in consonance with the definition of ‘Games of Skill’ under the Act.

(5) The Act applies to any territory in India in which “games of skill” are permitted and are recognised as being exempt from the ambit of “gambling”.

This would raise serious legal issues as till now the legality of games like online poker, online rummy, e-sports, fantasy sports, online card games, online fantasy games, online lotteries, etc is not clear.

P4LO has been managing a Blog titled Online Gaming And Gambling Laws And Regulations In India to help online gaming and online gambling stakeholders of India and other jurisdictions. This Blog can be used as a guidance by the gaming stakeholders and if they need our techno legal professional assistance, they can establish a client attorney relationship and seek our services.

(6) Indian place of business and Indian connections are essential for getting a licence from the Nagaland government. An interest in any online or offline gambling activities in India or abroad would bar an individual or entity from getting the licence.

(7) The State Government, may, by notification, designate an authority or body to monitor and regulate the activities of all licensees to ensure compliance with the provisions of this Act, and to settle all disputes arising from the activities conducted under this Act

(8) If the licensee operates in a state where the state government believes the company is violating the provisions of the act or its rules, or in violation of local laws, it may inform the licensing authority of Nagaland. The licensing authority shall then try and get the issues resolved.

P4LO welcomes this legislation from Nagaland government. However, there are certain techno legal issues that have skipped the attention of government of Nagaland. It would be prudent to cover those issues before the rules are notified by the Nagaland government.

Further, in their own interest, the online gaming stakeholders who are planning to explore Nagaland's market must also undergo a techno legal audit so that their online gaming business runs smoothly the moment it is started.

Sunday, May 22, 2016

Is It Legal To Run An Online Fantasy Sports Website In India

As growing number of people have started using information and communication technology (ICT), as has also encouraged many entrepreneurs to launch ICT enabled e-commerce and business ventures. Few such ventures include online gaming, online gambling, online poker, online rummy, online games, e-sports websites, etc. Another related business venture is online fantasy sports websites that have become very popular across the world.

Fantasy sports have also become very popular in India. However, the legality of running and playing online fantasy sports in India is still a tricky issue. We at Perry4Law Law Firm are frequently approached regarding managing the legal issues of online gaming, online gambling, online poker, online rummy, online games, e-sports websites, online fantasy sports websites, etc in India and other jurisdictions. We have suggested all our client to comply with techno legal compliances associated with these online and virtual games. We have very categorically told them they should not launch their websites and business ventures before they comply with techno legal issues associated with these websites.

Just like any other online games, entrepreneurs engaged in fantasy sports in India are also required to comply with certain techno legal requirements. There is a need to change the mindset of online games entrepreneurs who are still not serious about legal issues in India. Even if some are interested in complying with the legal requirements of online gaming they are ill advised and do not comply with Indian laws properly. The fact remains that there are a set of legal compliances for running an online fantasy sports website in India.

This techno legal compliance must not be confused with a dedicated law for running an online fantasy websites in India that is still missing. The problem stems from the fact that there is no clear regulatory framework that can be looked upon to decide legality or illegality of online poker, online rummy, online card games, fantasy sports, etc in India. On the other hand, regulatory compliances are scattered among different laws of India and combining them together at a single place is a big challenge. Unfortunately, online gaming and fantasy sports websites in India are not complying with these techno legal requirements and they are on the wrong side of Indian laws. Merely because government has not taken legal actions against them does not mean that it is legal to run an online fantasy sports website without complying with the techno legal requirements.

As on date, online gaming, online gambling, fantasy sports and online lotteries websites are not complying with the internet intermediary compliances and cyber law due diligence (pdf) requirements prescribed under the Information Technology Act 2000. Similarly, almost all of the online poker websites in India are violating one or other laws of India. Although online gaming market in India is booming yet regulatory compliances cannot be ignored. It seems online gaming and online gambling industry of India is not considering regulations while conducting their businesses in India.

Perry4Law conducted a techno legal audit of various fantasy sports websites operating in India and we found the same problems with them as have been discussed above. Almost all of these fantasy sports websites have used a single cut-copy-paste criteria when it comes to techno legal compliances and drafting of legal documents of the websites. Clearly, these online fantasy sports websites are violating the laws of India and they may be prosecuted very soon. Those using mobile applications can also be prosecuted if they fail to comply with techno legal regulatory norms of India.

Even the banks, payment gateways and online payment merchants, mobile payment vendors, etc supporting these online poker, online rummy, online card games and fantasy sports websites can be held liable for not following cyber law due diligence norms as they have blindly approved online payment option to these illegal and law breaking websites. These banks and payment gateways can also be held liable for money laundering, FEMA violations and assisting in tax evasion. If such banks, payment gateways and online payment merchants have already approved such illegal and law breaking online poker, online rummy, online games and fantasy sports websites in India, it is in their own interest to cancel such approval immediately. The banks etc must ask them to first comply with applicable techno legal compliances and then support their claims with a proper techno legal consultancy from a reputed law firm.

If you need a techno legal compliance and legal consultancy from Perry4Law for your online games or fantasy sports, please establish a client attorney relationship so that we can start working upon your project. Perry4Law wishes all the best to all gaming stakeholders and entrepreneurs.

Sunday, May 15, 2016

E-Commerce Websites And Online Pharmacy Companies Are Not Complying With Techno Legal Regulations Of India For Online Medicine Sales

Online pharmacies are poised to big growth in Asia and India is number one choice in this regard. There is no dearth of entrepreneurship in India and there are plenty of online pharmacy and healthcare entrepreneurs in India. As on date most of these entrepreneurs are stressing upon business growth and development rather than upon regulatory compliances. This is more so when we have no dedicated laws for online pharmacies, telemedicine, e-health, m-health, privacy protection, data protection (pdf), cloud computing, etc. Healthcare cyber security is another area of concern that most of the healthcare service providers in India are currently ignoring.

Nevertheless, telemedicine and online pharmacies businesses in India must comply with existing techno legal laws of India. But this is not happening as on date and many e-commerce portals have been facing heat of law enforcement agencies of India. For instance, Maharashtra’s FDA has already ordered filing of FIRs against Snapdeal, its CEO Kunal Bahl, directors and distributors for online sale of prescription drugs. Similarly the Indian government has just clarified about the Foreign Direct Investment (FDI) in e-commerce sector of India so that foreign exchange related violations can be better tackled. The Delhi High Court has already ordered the government to investigate 21 e-commerce websites for possible violations of foreign direct investment (FDI) laws. But as on date the techno legal compliances for e-commerce industry in India are not complied with by a dominant majority of e-commerce businesses.

Online sale and purchase of prescribed drugs and medicines in India is still a neglected area as far as regulations are concerned. Till May 2016 we have no dedicated online pharmacies laws in India and telemedicine laws in India. As a result illegal and unregulated online sales of prescribed medicines in India have increased a lot. This fact also came to the knowledge of Indian government and now online pharmacies websites of India are under regulatory scanner and punishment may follow. In fact, the fast growing and uncontrollable number of online pharmacies, mostly based abroad, has posed a serious challenge to State drug control authorities. They are simply not in a position to regulate the affairs of these online pharmacies that are openly violating the laws of India.

The Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945, have clear guidelines on the sale of Schedule H and Schedule X drugs. These can be sold only on prescription and there are specific rules, including for labelling. Even bar-coding of primary level packaging of export consignment of pharmaceuticals and drugs have been prescribed by India. The Directorate General of Foreign Trade (DGFT) has recently amended the procedure for implementation of the Track and Trace system for export of pharmaceutical and drug consignments from India.

Individuals and companies selling pharmaceutical products through website are also required to comply with various laws. These include laws related to medicines and pharmacy profession and cyber law of India. Surprisingly most of the online pharmacies stores and websites in India are not aware about the cyber law due diligence requirements and Internet intermediary liabilities. As a result they are violating the provisions of Information Technology Act, 2000.

In the absence of clear cut policies and guidance, e-health in India is facing legal roadblocks. Till now we do not have any dedicated e-health laws and regulations in India. The legal enablement of e-health in India is urgently required. In United States, the Health Insurance Portability And Accountability Act Of 1996 (pdf) and Health Information Technology for Economic and Clinical Health Act (HITECH Act), etc are some of the laws that take care of medico legal and techno legal issues of e-health and telemedicine. Laws like these are missing in India.

There is also a gross deficiency of data protection and privacy laws in India. Thus, private data and health records can be leaked by these online pharmacies with little grievance redressal and compensation mechanism. It is high time for Indian government to regulate illegal and unethical online pharmacies operating in India.

Friday, May 13, 2016

Amazon And Its Sellers Are Facing Investigation In India For Falsely Claiming Central Value Added Tax (Cenvat) Credit

E-commerce is a relatively new concept in India and as such various aspects related to it are still developing. One such aspect is legal issues associated with e-commerce in India especially with conflict of laws issues. E-commerce laws in India are still maturing as we have basic level legal framework regarding e-commerce in India as incorporated in the Information Technology Act, 2000 (IT Act 2000). However, there is no clarity regarding legal or illegal usage of e-commerce platforms in India as on date.

Recently, the Indian government clarified about the Foreign Direct Investment (FDI) in E-Commerce Sector of India. But FDI and taxation related violations are still happening in India as Indian government has not taken a firm stand in this regard. A software for calculating e-commerce exports was also developed by Indian government. Nevertheless, legal violations by big e-commerce platforms of India still continues especially for online pharmacies, telemedicine, online gambling, e-health, m-health, internet of things (IoT), etc. E-commerce disputes resolution is another area that requires urgent attention of Indian government. Technology driven initiatives like e-courts and online dispute resolution (ODR) must be encouraged by Indian government for resolution of e-commerce disputes in India.

Now it has been reported that Amazon and 50 of its sellers are facing investigations for allegedly falsely claiming Central Value Added Tax (Cenvat) credit and evading tax of about Rs 118 crore. Aggregators such as Amazon pay service tax to the seller. Some sellers had not deposited the service tax with the government even after claiming it from the e-commerce giant. The Directorate General of Central Excise Intelligence (DGCEI) is investigating the matter. Traders are alleged to have misused the Cenvat scheme, which allows a manufacturer or service provider a relief from the taxes paid on inputs to manufacturing of final products or services. DGCEI had detected that bogus invoices of declared goods were issued to merchants through dummy firms. Verifications revealed that the firms said to be providing the goods were non-existent.

Officers of the DGCEI have conducted search operations at Amazon's business premises across the country and at its headquarters in Bengaluru, in January. "So far, the total tax evasion we have been able to establish is to the tune of Rs 118 crore, which could increase. We will soon issue show cause notices to respective sellers," a senior officer said. "We have recorded the statement of Amazon executives and are assessing the details provided by them," he added. Amazon India has confirmed that the DGCEI had raised some questions around their promotion programme. Amazon has cooperated with the authorities to the fullest extent and provided them with all the information that they needed. The DGCEI is also probing if Amazon had any involvement in the merchants claiming Cenvat credit.

Monday, April 25, 2016

E-Commerce Disputes In India Would Now Be Resolved Using Online Dispute Resolution (ODR) Mechanisms

Effective and timely dispute resolution is sine quo non for ease of doing business in any country. India has been facing the problem of mammoth backlog of legal cases that has overburdened the Indian judiciary to the extent of almost collapse. This scenario is going to worsen in near future as Indian government has been encouraging projects like digital India, make in India, startups India, etc. As these fields are new, they would give rise to litigation on the one hand and lack of knowledge about these techno legal issues on the part of lawyers and judges on the other hand.

Perry4Law Organisation (P4LO) has come out with some techno legal solutions to resolve these issues. It has launched unique techno legal projects on e-courts and online dispute resolution (ODR) in India. These projects can be utilised by Indian government, public sector undertakings (PSU), Indian companies, multi national companies (MNCs), national and international organisations, individuals, etc. One such segment that can use these techno legal service is the e-commerce industry of India. A prototype of a platform to resolve e-commerce disputes in India can be accessed here. We are working on a model that would utilise the existing and future techno legal experience of P4LO regarding resolving e-commerce disputes through ODR.

E-commerce has introduced significant choices for Indian consumers and customers. However, e-commerce in India has also given rise to many disputes by the consumers purchasing the products from e-commerce websites.

There is no formal e-commerce dispute resolution regulatory mechanism in India as we have no dedicated e-commerce laws in India. In fact, many e-commerce websites are not following Indian laws at all and they are also not very fair while dealing with their consumers. Allegations of predatory pricing, tax avoidance, anti competitive practices, etc have been leveled against big e-commerce players of India.

As a result, disputes are common in India that are not satisfactorily redressed. This reduces the confidence in the e-commerce segment and the unsatisfied consumers have little choice against the big e-commerce players. At a time when we are moving toward global norms for e-commerce business activities, the present e-commerce environment of India needs fine tuning and regulatory scrutiny. In fact, India is exploring the possibility of regulation of e-commerce through either Telecom Regulatory Authority of India (TRAI) or through different Ministries/Departments of Central Government in a collective manner.

It is obvious that e-commerce related issues are not easy to manage. E-commerce disputes resolution is even more difficult and challenging especially when Indian Courts are already overburdened with court cases. Of course, establishment of e-courts in India and use of online dispute resolution (ODR) in India are very viable and convincing options before the Indian Government.

To make ODR a success in India, Techno Legal Centre of Excellence for Online Dispute Resolution (ODR) in India (TLCEODRI) has been providing its techno legal ODR services to national and international stakeholders. TLCEODRI has now decided to manage e-commerce disputes resolution in India through its techno legal ODR platform. To implement this initiative in a smooth manner, an ODR Discussion Forum has been started by TLCEODRI.

We have also started a dedicated Board/Thread at the ODR Discussion Forum for E-Commerce Dispute resolution In India through ODR (registration required). This is a good opportunity for e-commerce websites of India and abroad to get good techno legal insight about Indian laws and their implementation to e-commerce field.

The access and registration to this Board is allowed to e-commerce websites alone that have already been established and are operating in India. Our existing e-commerce clients and other clients can contact us for immediate activation of their accounts while the registration request of other e-commerce websites would be duly approved/disapproved by our moderators/administrators. If an e-commerce websites is engaging us for our techno legal services, it would be granted immediate access to this segment at its request.

Very soon we would introduce additional features for e-commerce companies and online consumers. This would also include online filing of complaints and grievance by the consumers and other aggrieved individuals/companies against the e-commerce companies of India and abroad. Such complaints and grievances would be openly available for public access to general public, regulatory authorities and other e-commerce stakeholders.

We would also introduce a system where grievance can be managed by the e-commerce companies/websites and their consumers through multiple dispute resolution processes and stages of TLCEODRI. This would include conciliation, mediation and arbitration through ODR mechanisms. Please check our ODR Discussion Forum for regular updates about the ODR services of TLCEODRI.

Saturday, April 16, 2016

Software For Calculating E-Commerce Exports Developed By Indian Government

Indian government has been streamlining e-commerce and activities related to the same for the past one year. Initially an e-commerce friendly foreign direct investment policy was formulated by Indian government. The same may be accessed at Consolidated FDI Policy Circular Of 2015 By DIPP (pdf). Then guidelines were issued to further clarify the e-commerce related business activities in India. The same can be accessed at Guidelines For Foreign Direct Investment (FDI) On E-Commerce 2016 Series (pdf).
Now Indian government is testing a software that intends to capture crucial data related to export of e-commerce related goods and services in India. Indian government has already indicated that it would impose tax on online transactions happening in India for certain cases. For instance, according to the Budget announcement, any person or entity that makes a payment exceeding Rs 1 lakh in a financial year to a non-resident technology company will now need to withhold 6% tax on the gross amount being paid as an equalisation levy.
The said rule is applicable when the payment is made to companies that don't have a permanent establishment in India. This tax, however, is only applicable when the payment has been made to avail certain B2B services from these technology companies. Specified services include online and digital advertising or any other services for using the digital advertising space. This list, however, may be expanded soon.
Indian government now plans to tap data on overseas online sales as part of efforts to boost outbound shipments through e-commerce platforms and channel benefits to these dedicated exporters. Indian government has made a software for e-commerce exports that would capture data for further action and policy decisions. This would benefit small exporters as customised solutions can be then provided to them by Indian government. Presently the value of items shipped through couriers is often not captured in export data because they are categorised as samples or gifts. These are labeleled as samples because under the normal export channel exporters have to file shipping bills and are subject to checks by custom officials, which is cumbersome, especially for small exporters with low-value shipments. The software intends to mitigate these rigours and further help in claiming duty drawbacks for e-commerce exports. To give benefits to small exporters, the director general of Foreign Trade has defined "e-commerce" as the buying and selling of goods and services, including digital products, conducted over digital and electronic networks.
These steps are being introduced a year after the government provided export incentives to the shipment of goods through couriers or foreign post offices using e-commerce in the Foreign Trade Policy of 2015-2020. At present, exports that can avail of these sops are capped at Rs 25,000 per consignment, a value considered small for such purchases. Moreover, only six product categories i.e. handicrafts, handlooms, toys, customised fashion garments, books and leather footwear are entitled to these incentives under the Merchandise Exports from India Scheme (MEIS).
Source: E-Retailing Laws.

Foreign Direct Investment (FDI) In E-Retailing Sector Of India 2016 Series

India is presently witnessing an e-retailing era. This is a golden time for e-retailing entrepreneurs who have multiple domains to explore. This is also a challenging period for the Indian government that is clearly struggling to deal with technology related issues. Some of these issues include taxation of online transactions by companies like Google, foreign direct investment (FDI) regulations for e-retailing companies, techno legal framework for online businesses, cyber security issues of e-retailing businesses in India, e-commerce dispute resolutions, etc.

As per the existing FDI policy, contained in the "Consolidated FDI Policy Circular 2015" (pdf) (FDI Policy) as amended from time to time, FDI up to 100% under automatic route is permitted in Business to Business (B2B) e-commerce. No FDI is permitted in Business to Consumer (B2C) e-commerce. However, FDI in B2C e-commerce is permitted if certain conditions are fulfilled.

However, companies are violating these norms by accepting FDI by citing different purposes for the use of such FDI money. Both the Reserve Bank of India (RBI) and Enforcement Directorate (ED) are aware of these issues but none of them has taken any action against the guilty individuals and companies. RBI is also maintaining a vigil over e-commerce gateway operators, many of whom store financial information about Indians on overseas servers, but is not imposing new stringent regulations on new form of transactions.

In other such developments, the Maharashtra’s FDA ordered filing of FIR against Snapdeal, its CEO Kunal Bahl, Directors and distributors for online sale of prescription drugs. There are many techno legal requirements to open online pharmacy stores in India that almost all e-retailing fail to adhere to. To deal with this nuisance, a dedicated online pharmacy law is needed for India. For some time it was believed that the Telecom Regulatory Authority of India (TRAI) may be given the task to regulate e-commerce in India. However, TRAI refused to take the additional responsibility in this regard.

As far as FDI is concerned, the documents titled Consolidated FDI Policy Circular Of 2015 By DIPP (pdf) and Guidelines For Foreign Direct Investment (FDI) On E-Commerce 2016 Series (pdf) would be helpful for detailed insight. However, Indian government must be ready for new challenges from global players. For instance, recently US sought trade rules for e-commerce and cloud computing under the WTO banner. Similarly, deep discounting and predatory pricing issues are also required to be resolved by Indian government. Taxation issues are already vexing Indian government for long. We hope that these issue would be resolved by Indian government very soon.

Thursday, March 31, 2016

Online Gaming Industry And Laws In India

Online gaming industry in India has seen promising trends in India in the year 2015. Online gaming entrepreneurs are also very enthusiastic about the future of online gaming industry in India. At Perry4Law Organisation (P4LO) we have been helping various online gaming entrepreneurs in complying with techno legal requirements of Indian and other jurisdictions. These include techno legal compliances about online poker, online rummy, fantasy games, mobile games, Internet games, e-sports, card games, lotteries in India, etc.

However, a disturbing trend of "legal violations" is fast dominating the online gaming industry of India. For instance, the fine line and distinction between online gambling and online gaming in India is not appreciated and understood by online gambling and gaming enthusiastics of India. As a result they are frequently prosecuted in India for violating online gaming and online gambling laws of India. Even technical mechanisms are also used to curb such activities in restricted territories or zones. For instance, the Andhra Pradesh CID has requested the Cert-In to block Playwin/s website in AP on the ground of prohibition of online gambling in AP. In the past, Kerala refused permission to Future Gaming Solutions India Private Ltd to sell Nagaland lotteries in the state.

We have very specific and unique online poker laws and regulations in India. Whether by design or ignorance, online poker websites in India are violating these laws of India. Many online poker players in India also play the same in active violation of the laws of India in this regard. Most of them are not even aware whether playing online poker in India is legal or illegal. Further, taxability of online poker websites of India is another crucial issue that is frequently ignored by poker entrepreneurs. The laws and regulations for online gambling and online gaming in India must be religiously followed by all the stakeholders in their own interest.

Both online gaming and online gambling market of India is fast booming and maturing. Entrepreneurs in these fields have started exploring Indian markets to establish their ventures in India. Some of them have even established their businesses in neighbour countries like Nepal and Sri Lanka so that the moment Indian market is liberalised they can easily establish their venture in India. Amazon is also targeting home entertainment segment as it bought Videogame Studio Double Helix Games.

Mobile games have also become popular world over, including India. The market size for online games and mobile games is tremendous. There are very few players as on date in the mobile gaming industry of India. However, these players have to resolve many techno legal issues before they can establish their businesses in India. These include mobile payment compliances, payment gateway and POS terminal service due diligence, websites development compliances, Internet intermediary obligations, cyber law due diligence (PDF), etc. Presently many mobile application developers are violating Indian laws and may be prosecuted in the near future.

Perry4Law strongly recommends that online and mobile gaming entrepreneurs and businesses in India must ensure techno legal compliances before launching their respective ventures in India. Avoiding these techno legal compliances would prove counter productive in the long run.

Monday, November 16, 2015

Social Media Websites Are Not Complying With Laws Of India

India’s struggle against social media websites to fall in line with Indian laws continues even in Narendra Modi’s regime. To make the matter worst we have no social media laws in India or any effective and implementable social media policy of India. Of course, a new framework for use of social media by governmental organisations has been suggested by Indian government in the past but that is of little help in solving the present problem at hand. The real solution, according to Praveen Dalal, is formulation of a techno legal framework that can address the diverse and complicated issues of cyberspace in India.

The problem is going to increase with the adoption of technology driven projects and initiatives like Digital India, Internet of Things (PDF), etc that intends to ensure e-delivery of services in India. Social media websites have been given a push by the recent Supreme Court’s judgement that struck down (PDF) Section 66A of Information Technology Act, 2000 as violative of freedom to speech and expression.

However, Supreme Court committed a big mistake in this regard as it unintentionally and innocently killing the cyber law due diligence requirements (PDF) for social media websites as well. There is an urgent need on the part of Indian Supreme Court to review this judgment as we need a stronger cyber law due diligence in India rather than a weak, ineffective and crime supporting regime. Now even genuine victims of cyber bullying, cyber crimes and sexual offences are left with almost nil remedies. We at Perry4Law’s Techno Legal Base (PTLB) believe that this judgment of Supreme Court must be immediately reviewed in public interest.
At the same time PTLB also recommends that a dedicated law for social media websites is need of the hour. This must include a stringent and clear Internet intermediary liability for various technology companies and platforms that are operating in India or providing their services in India. Bot the Supreme Court and Indian government have failed to appreciate the gravity of this situation and this has unduly favoured such social media websites in India. The liability of Internet intermediaries under the recent Copyright Amendment Act, 2012 (CAA 2012) needs to be revisited as well. The liability of Internet intermediaries for copyright violations is still poorly drafted that needs to be corrected immediately to strengthen and give effect to the national litigation policy of India.

Conflict of laws in cyberspace is another area that Indian government must keep in mind. For instance, intellectual property rights protection of entertainment industry of India on internet, cyberspace and in a digital environment is still neglected by Indian government and social media websites. International legal issues of cyber attacks, cyber terrorism, cyber espionage, cyber warfare and cyber crimes are also not easy to manage and they must be managed properly by India. Cross border cyber crimes are very difficult to trace and authorship attribution of such cyber crimes are even more difficult to prove.

Even international law enforcement collaborative efforts like Mutual Legal Assistance Treaty (MLAT) are not always followed by concerned country. Recently United States refused to serve summons upon U.S. websites including Facebook and Google. This process of serving summons upon U.S. websites through U.S. government was adopted as the Indian subsidiaries of these foreign companies took the defence that they are just sales outlets in India and nothing more. To meet this challenge Indian government has now declared that foreign companies and e-commerce portals would be required to register in India and comply with Indian laws.

However, the problem of law enforcement agencies continues as it is. For instance, recently the Delhi Police was able to get the IP Address logs of Amrita Rai’s G-Mail account. But till the time Google responded back, much of the digital evidence has already been lost and it is very difficult to nab the culprits now. Similarly, the case of posting of offensive message upon Facebook by the miscreants regarding Rajnath Singh’s Son also hit a roadblock so far. There are numerous such cases where the accused and cyber criminals cannot be nabbed because the social media website either does not comply with Indian laws or they take such long time that the information provided by them is ultimately useless.

Recently a fake tweet on Prime Minister Narendra Modi was posted on the social media website but the culprit has still to be brought to the books. The Delhi Police’s cyber cell department is also unable to do much in this regard in the absence of cooperation from the social media website. This is hampering the police investigation in this case. Similarly, it took two years to get Twitter’s law enforcement team to act on a complaint filed by current finance minister Arun Jaitley in 2011 about a fake Twitter handle in his name. This shows the level of cooperation by social media websites to Indian law enforcement official’s requests.

“Initially, we tried to reach out to every social media website to establish channels other than the already existing norms but we haven’t been successful in our attempt,” said BK Singh, deputy commissioner of police, Economic Offences Wing (EOW). “Sometimes websites refuse to give information on various grounds, including freedom of speech because some activities are considered criminal in India and may not fall in the category of offences in other countries,” said an investigating officer of the cyber cell. It is high time that social media websites must be made amenable to Indian laws and their compliances.

Indian Online Rummy And Online Poker Websites In Legal Tangles

Online games like online poker, online rummy, online card games, etc are increasingly becoming popular in India. However, the regulatory environment for these online games is still in a state of mess. So bad is the position that even the traditional and offline rummy and poker games are still considered gambling by many States in India. Police and other authorities are still trying to ascertain how to manage offline rummy and poker games in various States. As far as online poker, online rummy, online card games, etc are concerned, law enforcement agencies of India are clueless as to their legality or illegality. In short, online poker, online rummy, online card games, etc are in a state of limbo and uncertainty.

To clear this legal uncertainty, many online games providers approached the Supreme Court while it was dealing one of the cases pertaining to offline rummy. Obviously, that was a premature attempt on the part of these online games providers as not only the matter pertained to a particular party but also the matter relates to offline rummy in a particular State. However, online games providers were hoping that the Supreme Court would clear the mist of uncertainty in this regard. This was a mistaken notion as decision of the Supreme Court on the facts and circumstances of a particular case cannot be decisive for online games providers in India. Even otherwise, they have no locus standi to approach the Supreme Court in the present circumstances.

The Supreme Court realising this situation asked the Central Government to clarify it stand on the legality of online games in India. However, Central Government was not keen enough to do this exercise and it gave no opinion to the Supreme Court on this regard. Faced with the techno legal issues involved in adjudication of the legality or illegality of online card games, the Supreme Court of India held that it would not decide the legality or illegality of online poker, online rummy, online card games, etc. However, a decision about offline rummy is expected from the Supreme Court next week but that would have no bearing upon the legality or illegality of online poker, online rummy, online card games, etc.

Now the providers of online poker, online rummy, online card games, etc must satisfy the twin requirements of Indian laws. Firstly, they have to prove that online poker, online rummy, online card games, etc are games of skills and not chance. This they cannot prove till there is an authoritative pronouncement from the Supreme Court in this regard. Till that time they would be vulnerable to various forms of legal actions and sanctions as their acts maybe considered to be acts of gambling by various law enforcement agencies of India. Any authoritative pronouncement form the Supreme Court regarding legality or illegality of online poker, online rummy, online card games, etc is ruled out for another decade in the present circumstances and till that time these online games providers would be in a legally vulnerable position.

Secondly, even if online poker, online rummy, online card games, etc are presumed to be games of skills, still they are required to comply with techno legal requirements. There are hardly one or two online card games providers that are complying with these techno legal requirements. Most of the providers of online poker, online rummy, online card games, etc are openly flouting the laws of India especially the techno legal obligations and cyber law due diligence (PDF) requirements. Now as the Supreme Court has refused to decide about the legality or illegality of running websites of online poker, online rummy, online card games, etc, it is imperative that they comply with various techno legal laws of India in this regard. The argument of games of skills is not relevant when it comes to compliance with laws of India.

Online card games stakeholders must not be misguided by the misleading and incorrect media reports about the order of the Supreme Court. Nowhere the Supreme Court has held that of online poker, online rummy, online card games, etc are legal in India. On the contrary, Supreme Court has categorically held that it is not going to decide about the legality or illegality of these websites of online poker, online rummy, online card games, etc. In short, the websites of online poker, online rummy, online card games, etc are operating at their own risks and so are the players who play at these websites.

The only hope of websites running online poker, online rummy, online card games, etc is that the Central Government formulates techno legal framework that can accommodate online games and other Internet related aspects. That is a long and time consuming process and it cannot be expected for a long period of time. Thus, all online games provider must immediately draft their terms and conditions and other legal documents in conformity with the laws of India, especially the Information Technology Act, 2000. Those who have already put at place basic terms and conditions must revisit them and make them in compliance with the present legal requirements.

Tuesday, October 14, 2014

E-Commerce Laws In India Needed

E-commerce has its origin in foreign jurisdictions especially in developed nations like United States. These jurisdictions have proper laws and adequate infrastructure to cater the needs of e-commerce stakeholders. This has helped these stakeholders in not only complying with the laws of these jurisdictions but also in contributing towards the economy of these jurisdictions.

E-commerce in India is a totally different class. It has all the advantages of profit making and commercial viability but is neither regulated by any dedicated e-commerce law nor is it contributing towards the economic and social growth of India. 

Legal provisions pertaining to foreign direct investment (FDI), foreign exchange management act (FEMA), national taxation laws, cyber law due diligence (PDF), cyber security due diligence, e-commerce due diligence, etc are openly ignored in India. In some instance, enforcement directorate (ED) has also initiated investigation against big e-commerce players like Myntra, Flipkart and many more e-commerce websites operating in India. Many stakeholders have also protested against the unfair trade practices and predatory pricing tactics of Indian e-commerce websites.

The matter has reached to the level of Indian government that has also promised to look into the matter and draft suitable e-commerce law of India, if required. The alternative approach that can be adopted by Indian government is to amend the Information Technology Act, 2000 (IT Act 2000) to accommodate e-commerce related issues.

We at Perry4Law believe that a dedicated e-commerce law of India is urgently required and Indian websites must be suitably regulated. Indian government must also formulate a techno legal framework to take care of complicated technology related legal issues in India. Amending the IT Act 2000 to accommodate e-commerce related issues is not a very good option in this regard and must be the last choice.

Monday, August 25, 2014

Cyber Security Issues Of E-Commerce Business In India



E-commerce business is flourishing at a great speed in India. Most of the e-commerce entrepreneurs are concentrating upon commercial aspects with an eye upon profit motive. In this race they are ignoring techno legal requirements that may affect their rights in the long run.

For instance, e-commerce laws in India are spread across multiple legal frameworks and they are seldom followed by Indian e-commerce stakeholders. Even foreign e-commerce players and portals are required to be registered in India and comply with Indian laws.

Similarly, e-commerce players are required to comply with cyber law and cyber security regulatory compliances in India. A dedicated law for cyber security breaches disclosures is also in pipeline that would impose stringent obligations upon e-commerce players operating in India. Companies that would fail to comply with the cyber law due diligence requirements in India may be punished according to Indian laws.

The cyber security challenges for Indian companies are very difficult to manage in the absence of proper planning and management. Directors of Indian companies and e-commerce websites can be held liable for improper cyber security dealings in India.

Thus, cyber security issues of e-commerce businesses in India cannot be ignored by various stakeholders except at the risk of litigations and heavy monetary compensations. 

Monday, April 22, 2013

E-Commerce Websites In India Must Be Regulated By Indian Government

An ineffective cyber law of India and lack of cyber law skills among the law enforcement agencies of India is resulting in increased cyber crimes and offences through the medium of e-commerce websites in India. Further, cyber law awareness in India is also missing that is resulting in increased e-commerce frauds in India.

In these circumstances, e-commerce websites frauds, offences and crimes in India have increased a lot. For instance, the e-commerce sites selling adult merchandise in India are openly violating the laws of India. Similarly, e-commerce websites in India are engaging in punishable soft porn publication and Indian government is sleeping over the matter.

There are well recognised legal requirements to start an e-commerce website in India and the legal formalities required for starting e-commerce business in India. As on date, the e-commerce websites are not following such techno legal requirements. They are also not following the cyber law due diligence requirements of India and are liable for Internet intermediary liability in India.

E-commerce websites dealing with online pharmacies, online gamming and gambling, online selling of adult merchandise, etc are openly and continuously violating the laws of India, including the cyber law of India. However, India government has yet to take action against these offending e-commerce websites of India.

Fortunately, the Supreme Court of India is taking some action in this regard. Recently, the Supreme Court of India has sought response from central government over blocking of porn website sin India.  Similarly, the Supreme Court of India has entertained a public interest litigation seeking regulations and guidelines for effective investigation of cyber crimes in India.

The cyber law of India is too weak to tackle cyber criminals effectively. In fact, cyber law of India should be repealed and an effective cyber law must be formulated as soon as possible. The cyber criminals are becoming innovative day by day and our laws are grossly inadequate to deal with the same.

For instance, numerous websites, both Indian and foreign, are violating the cyber law of India by operating illegal e-commerce websites in India. These websites are engaging in illegal trade in wildlife, promising home delivery of live animals, prized animal parts and rare medicinal plants from across nations through simple internet banking formats.

These are transnational crimes where the authorship attribution for cyber crimes is very difficult to establish. Realising this reality, the India's wildlife crime control bureau (WCCB) is utilising the services of cyber crime experts to trace such cyber criminals. A preliminary inquiry by WCCB bureau's cyber crime specialists has indicated that nearly a thousand websites are advertising sale and delivery of live animals and animal products protected under the Wildlife Protection Act, 1972 of India and the global convention on international trade in endangered species (CITES). 

Surprisingly, most of these websites are popular shopping websites, online classifieds and free ad posting websites, etc. They are clearly violating the cyber law and other laws of India and Indian government is not taking any action against these websites. It is high time to take strict penal action against such illegal e-commerce websites in India.

Wednesday, March 13, 2013

Telemedicine Laws In India

There is no second opinion about the fact that when technology is used for medical purposes, it gives rise to medico legal and techno legal issues. Countries around the world have realised this fact and they have made suitable laws to tackle these medico legal and techno legal issues.

For instance, in United States, the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Health Information Technology for Economic and Clinical Health Act (HITECH Act), etc are some of the laws that take care of medico legal and techno legal issues of e-health and telemedicine.

On the other hand, we have no dedicated telemedicine laws in India. Issues like online sales of prescribed medicines in India, digital communication channels for drugs and healthcare products in Indiaonline sales and purchase of prescribed drugs and medicines in India, etc are still vague and confusing.

E-health laws and regulations in India are still missing and legal enablement of e-health in India is needed on an urgent basis. As on date e-health in India is facing legal roadblocks. Till now we do not have any dedicated e-health laws and regulations in India.

At Perry4Law Organisation and Perry4Law’s Techno Legal Base (PTLB) we firmly believe that dedicated telemedicine laws of India must be urgently formulated.

This is more so when there are many people and institutions in India that are using Internet in an illegal manner for selling medical products and services. Illegal and unregulated online sales of prescribed medicines in India are rampant and Indian government has still not regulated or controlled these online sales of medicines in India, especially in the NCR region.

Similarly, there are some medical professional and para medical professional who are using Internet for providing their services without following the applicable laws of India. There are also many online pharmacies in India that are violating Indian laws, especially the e-commerce laws and regulations of India.

It is high time for Indian government to regulated Internet related medical issues in India before they become a big nuisance and health hazard for Indian citizens and residents.

Source: P4LO Blog.

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